Finance functions will need to upskill and have more influence over decision-making to stay in the game.
More than two-thirds (68pc) of business leaders believe automation will shrink people numbers in the traditional finance function.
According to the latest PwC 2018 CFO Pulse Survey, 57pc believe that automation and artificial intelligence (AI) will have a significant impact on their business in the next three years.
‘The increasing adoption of digital technologies will be critical as the volume and breadth of data increases’
– AMY BALL
However, just 16pc are ready to seize the opportunities.
The survey revealed that six out of 10 (60pc) Irish finance leaders believe that technology will either completely or significantly reshape competition in their industry over the next three years.
Get ready for radical automation
Radical automation and use of AI (21pc) will be the top drivers for drastic change of traditional and accounting models beyond 2020.
However, the survey also highlights poor exposure to key technological innovations. Less than one in three (28pc) survey respondents have significant exposure to cloud-based technologies and data analytics.
Less than one-fifth have significant interaction with AI and robotics. Other emerging technologies such as blockchain, augmented reality (AR), virtual reality (VR) and chatbots scored very poor activity levels.
Despite the poor exposure to new technologies, 43pc of survey respondents said that they plan to invest more than €1m in emerging technologies in the next three years. Just 6pc said this would be more than €5m.
With nearly a third (31pc) of survey respondents reporting their ability to get a return from IT as a challenge, the importance of getting IT investment right the first time is critical, said Amy Ball, partner for performance improvement at PwC in Ireland.
Ball said that the focus on a reduced but upskilled workforce is on. She said 68pc of finance leaders are of the view that digitisation and automation will reduce the people numbers in their finance function in the next three years, of which 37pc said their people numbers would fall by more than 10pc.
“Leading finance functions will take on increasing responsibility and oversight for business performance and enhanced influence over decision-making,” Ball said.
“The increasing adoption of digital technologies will be critical as the volume and breadth of data increases.” She added that the low knowledge level of AR, VR, blockchain and chatbots “contrasts with trends where chatbots are very quickly outstripping mobile app development”.
Brexit and business sentiment
Because of Brexit and the troubling international trade winds, Ireland’s finance leaders are less confident about the future prospects for the country’s economy compared to two years ago.
The survey revealed that more than half (57pc) of Ireland’s finance leaders are favourable about the overall prospects for the Irish economy in the year ahead, down from 81pc in 2016, compared to a low of 11pc in 2012.
Nearly three-quarters (71pc) anticipate growth in revenues in the year ahead, slightly down from 2016 (76pc) but much improved on 2012 (59pc). 44pc anticipate growth in profits in the year ahead.
When it comes to being prepared for Brexit, 68pc reported to either not being prepared or not having made extensive plans for the consequences of Brexit. More than a third (38pc) said that their organisation’s level of trade with the UK would decline as a result of Brexit.
Top Brexit concerns according to the finance leaders are uncertainty for business/investment decisions (24pc), additional compliance (21pc), tariffs/import VAT (16pc) and additional costs or competitiveness (13pc).
However, there is a silver lining and Brexit opportunities were noted to include stronger relationships with like-minded member states (19pc), diversification in new markets/products (19pc), increased foreign direct investment (FDI) and jobs into Ireland, and a greater focus on improved cost competitiveness (13pc).
“As we go forward, Ireland’s finance leaders are more cautious about the future performance of Ireland’s economy as well as about some of their key business metrics, such as profits and costs,” Ball said.
“It is likely that Brexit is also adding to the uncertainty for many. With more restructuring on the cards, finance leaders are challenged to sustain growth, with many actively looking at ways to build business models that are fit for the future. Going forward, technology and automation will be key to the survival of the fittest. And getting this investment right first time will be critical.”